Toyota Goes For The Jugular: Zero Percent Financing

Edward Niedermeyer
by Edward Niedermeyer

Up to September, Toyota was weathering the new sales storm with relative grace. Sales volume has been dropping, but market share never declined the way it did last month. To stop the bleeding, ToMoCo is announcing a zero-percent interest promotion, hoping to lure in showroom traffic in a tight credit market. Of course luring in traffic and offering truly great deals aren’t one and the same. Toyota’s most popular and fuel-efficient cars are conspicuously absent from the list of qualifying nameplates, which includes Matrix, Corolla, Camry, RAV4, Highlander, FJ Cruiser, 4Runner, Sequoia, Sienna, Tacoma and Tundra. Further limiting the impact of this promotion is the increasing rarity of “well-qualified buyers.” Automotive News (sub) says one reason Toyota is reaching for incentives is the relative success of GM’s “Employee Pricing For All” deal, which is credited with helping the General regain ground against Toyota in September. Ultimately, Toyota may be the only automaker with the financial resources to offer low interest deals on so many vehicles, including the compact Corolla and Matrix. “And at the end of the day,” says Christopher Richter, an auto analyst with CLSA Asia-Pacific Markets “I don’t think the costs to Toyota will be that great.” There’s no doubt that showroom traffic should increase, and even if sales don’t pick up dramatically, the offer places a foot on the throats of Toyota’s value-positioned American competitors. Stay tuned for more details when October sales numbers come out.

Edward Niedermeyer
Edward Niedermeyer

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  • Oldyak Oldyak on Oct 03, 2008

    this isnt good for Toyota to be selling like this tells me that nobody,and I mean nobody,is buying right now! what a mess.... I think that the worst is yet to come! Really,how many people do you know that are even thinking about buying a new car? In my world..none. Its going to take more than a goverment bailout to fix this mess! And even if I wanted to buy a car right now...I would rather have the money in the bank(simple savings)than risk it! just my 2 cents

  • AGR AGR on Oct 03, 2008

    For Toyota to take such a hit in September sales is unusual. To subsequently see Toyota emulate GM in offering 0% financing is almost shocking. They can afford to do it, and they can afford to buy all sorts of paper through Toyota Credit. They are conveying the message that contrary to other manufacturers credit is not tight at Toyota. Toyota has the funds to do whatever they want, whenever they want in the US market, and they signaled to other manufacturers that they removed their gloves.

  • Anonymous Anonymous on Oct 03, 2008

    Panic at Toyota? Hmmmm.

  • Geotpf Geotpf on Oct 04, 2008

    Toyota is not panicking. Sales and profits may be down, but having your profits drop from ten billion dollars a year to, say, five billion dollars a year, is a problem that the Detroit Three would love to have. They, however, are adjusting to the shitty market. It's understandable. Although I'm somewhat surprised that this includes the Corolla, Matrix, and Camry, and not just trucks and SUVs. Then again, sales of the Corolla/Matrix were down 24.9% (DSR) and the Camry was down 24.0% (DSR) in September, so I guess they pretty much had to. This is the economy, stupid. Everybody took in it in the shorts last month.